by Jennifer Hill from interactive investor, 17th June 2024:
Discounts are wide across the investment trust universe, giving investors plenty of bargain-hunting potential.
The average discount across 288 investment trusts that publish net asset values (NAVs) was -17.7% at the end of May, compared to -5% across 241 trusts five years ago, according to an analysis by IpsoFacto Investor.
The renewable energy infrastructure sector slightly distorts the picture. The sector has 21 trusts on an average discount of -32.2%. In 2019, its five trusts had an average premium of 12.8%..
But with so many bargains around, which are the most attractive? We asked 10 investment experts to name their top investment trust bargain pick. All discount data below is to 11 June 2024..
Specialised supported housing provider Triple Point Social Housing has the widest discount of the picks at an eye-watering -55.9%.
“Its rental income is ultimately backed by the government, which pays housing benefit to cover rent,” says QuotedData’s property analyst Richard Williams. “Two of the trust’s 27 registered providers are in material rent arrears, which has knocked confidence but this is being addressed.”
Rents are linked to inflation and rental growth in 2024 should be 5%-6%, the balance sheet is “fairly strong” and the managers are selling properties to fund share buybacks. “There’s always the chance that somebody will bid for it as happened to rival Civitas Social Housing,” adds Williams.
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